Consider the Implementation of Monetary Policy

question 68

Multiple Choice

Consider the implementation of monetary policy.One difficulty in attempting to stabilize the economy by controlling the money supply is that

• A)firms may be sensitive to changes in the rate of interest.
• B)the Bank of Canada can print more money.
• C)the commercial banks may choose not to hold excess reserves.
• D)the money demand function may be unstable.
• E)the Canadian government requires long-term loans.

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Definitions:

Long-term Debt

Borrowings and financial obligations that are due for repayment beyond the period of one year.

Current Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its current assets by comparing its net sales to its current assets.

Accounts Receivable

Money owed to a company by customers for goods or services that have been delivered or used but not yet paid for.

Inventory Management

The supervision of non-capitalized assets (inventory) and stock items, including ordering, storing, and utilizing a company's inventory.